Foreign investors have largely stayed on the sidelines of Nigeria’s stock market, missing out on a remarkable rally that has propelled the Nigerian Exchange (NGX) to become the world’s best-performing equity market in dollar terms this year.

According to data tracked by Bloomberg across 92 global stock exchanges, Nigeria’s benchmark stock index has delivered about a 67 per cent return in US dollar terms, overtaking South Korea’s KOSPI, which posted a 66 per cent gain before slipping into a technical bear market.

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The strong performance has been driven by sweeping economic reforms, improved foreign exchange liquidity, a firmer naira and renewed investor confidence in Africa’s largest economy. The appreciation of the local currency has further boosted returns for investors holding Nigerian equities.

Despite the market’s stellar performance, many foreign investors remained underexposed to Nigerian stocks after years of currency instability and concerns over foreign exchange access, causing them to miss one of the strongest rallies in global equities.

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Analysts say the rebound reflects growing confidence in Nigeria’s reform agenda, with gains extending beyond equities to government bonds and the naira, signalling broader improvements in investor sentiment.

Market experts, however, caution that sustaining the momentum will depend on continued economic reforms, macroeconomic stability and the government’s ability to attract long-term foreign investment into the capital market.

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